Bar Charts (OHLC)

Each bar on a bar chart represents price performance for a specific
period. These periods could be as long as a month or as short as one
minute, depending on the purpose for which the chart is to be used.
Daily bar charts are the most popular.

The range is the distance between the high and the low on a bar. The
position of closing price on the bar indicates who
controls the market at the end of the
day, and their level of commitment.

Closing price at the top of the bar signals that buyers have
control. If they are committed
they will buy into the close of the market, with less profit-taking,
and move price towards the high for the day.

Closing price at the bottom of the bar indicates that sellers have
control. If they are committed they
will sell into the close and move price towards the low for the day.

If neither party is committed then price is likely to close towards the
middle of the range as profit-taking retraces part of the gains or losses
for the day.

Conflicting signals show indecision and a weakening trend. Be
on the alert for a trend reversal, but remember the Golden Rule:
Never assume that a trend has ended until there are clear
signals that the opposite trend has started.

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